This invention relates to measuring the impact of advertising on sales and profit in general, and in particular, to measuring the return on investment for specific types of advertising.
Media planners typically measure the effectiveness of delivery of a message to an audience to help them create future media plans. Often this effectiveness is quantified as the number of people that saw a particular advertisement in a given media. While this information can be useful, the ultimate measure of success for a media plan is the sales and profit that the plan generates.
Conventional methodologies for measuring sales and profits generated by advertisement, however, are extremely expensive and time consuming, and thus are nearly impossible to widely implement. Accordingly, what is needed is a quick, affordable, and accurate way to measure of the effectiveness and efficiency of an advertising media on sales and profits.
Pursuant to the present application, shortcomings of the existing art are overcome and additional advantages are provided through the provision of a system and method for determining the effectiveness and efficiency of advertising media.
In one example, a method is provided for determining the effect of an advertisement on profits generated by sales of a product advertised in a given market area over a particular period of time. A total of the number of impressions an advertisement makes on a plurality of potential customers through at least one specific form of advertising is compiled. At least one reduction rate is established for each of the total number of impressions for the at least one specific form of advertising. The at least one reduction rate variable for the at least one specific form of advertising is correlated with product sales. At least one correlation variable for the at least one specific form of advertising is determined. At least one saturation curve variable for the at least one specific form of advertising is calculated. The at least one saturation curve variable is correlated with product sales. A first regression coefficient is determined for the at least one specific form of advertising. A second regression coefficient is determined for the at least one specific form of advertising. The first and second regression coefficients are averaged for the at least one specific form of advertising to obtain an average coefficient for the at least one specific form of advertising. The product sales per impression are then calculated using the average coefficient for the at least one specific form of advertising.
In another example, a data processing system is provided for determining the effect of an advertisement on profits generated by sales of a product advertised in a given market area over a particular period of time. The data processing system includes computer code having an effectiveness and efficiency calculation component for calculating a total number of product sales resulting from an advertising impression.
In another example, a computer-readable medium is provided which includes computer-executable instructions for performing a method which comprises compiling a total number of impressions an advertisement makes on a plurality of potential customers through at least one specific form of advertising; establishing a reduction rate for each of the total number of impressions for the at least one specific form of advertising; determining at least one correlation variable for the at least one specific form of advertising; calculating at least one saturation curve variable for the at least one specific form of advertising; correlating the at least one saturation curve variable with product sales; determining a first regression coefficient for the at least one specific form of advertising; determining a second regression coefficient; averaging the first and second regression coefficients for each specific form of advertising to obtain an average coefficient for each specific form of advertising; and calculating the product sales per impression using the average coefficient for each specific form of advertising.